Advani, Arun, Hughson, Helen and Tarrant, Hannah (2021) Revenue and distributional modelling for a UK wealth tax. Fiscal Studies, 42 (3-4). pp. 699-736. doi:10.1111/1475-5890.12280 ISSN 0143-5671.

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Abstract

In this paper, we model the revenue that could be raised from an annual and a one-off wealth tax of the design recommended by Advani, Chamberlain and Summers in the Wealth Tax Commission's Final Report (2020). We examine the distributional effects of the tax, in terms of both wealth and other characteristics. We also estimate the share of taxpayers who would face liquidity constraints in meeting their tax liability. We find that an annual wealth tax charging 0.17 per cent on wealth above £500,000 could generate £10 billion in revenue, before administrative costs. Alternatively, a one-off tax charging 4.8 per cent (effectively 0.95 per cent per year, paid over a five-year period) on wealth above the same threshold, would generate £250 billion in revenue. To put our revenue estimates into context, we present revenue estimates and costings for some commonly proposed reforms to the existing set of taxes on capital.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HJ Public Finance
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Wealth tax -- Great Britain, Income distribution -- Great Britain, Income tax -- Great Britain, Revenue -- Great Britain
Journal or Publication Title:	Fiscal Studies
Publisher:	Wiley-Blackwell Publishing, Inc
ISSN:	0143-5671
Official Date:	October 2021
Dates:	Date Event October 2021 Published 25 October 2021 Available 19 July 2021 Accepted
Volume:	42
Number:	3-4
Page Range:	pp. 699-736
DOI:	10.1111/1475-5890.12280
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Open Access (Creative Commons)
Date of first compliant deposit:	25 August 2021
Date of first compliant Open Access:	29 October 2021
RIOXX Funder/Project Grant:	Project/Grant ID RIOXX Funder Name Funder ID ES/L011719/1 [ESRC] Economic and Social Research Council http://dx.doi.org/10.13039/501100000269 ES/V012657/1 [ESRC] Economic and Social Research Council http://dx.doi.org/10.13039/501100000269 AFSEE COVID-19 London School of Economics and Political Science http://dx.doi.org/10.13039/100011326
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